Train-building Industry

Andrew Griffiths Excerpts

Tuesday 12th July 2011 Westminster Hall

[Nigel Mills]

I think that Germany wins 26% of the time when it bids, and we win about 14%. However, I am not sure that those statistics work when we are talking about major infrastructure projects that are of huge overall significance, rather than about some of the smaller ones. Frankly, across the EU as a whole, we are a hugely advanced economy, with all the high skills and the value added. Therefore, we expect the UK to be able to do things that other economies cannot yet do, and to be winning contracts. The key point is that thousands and thousands of jobs are at stake. We are risking those jobs by playing by the rules, but it seems that the Germans, French and others are not.

Let us consider the Eurotunnel procurement. That contract was awarded not to Alstom of France, but to Siemens of Germany, which must be doing something right. The French went mad and had a judicial review to try to challenge that contract, because they were so surprised that it had not been awarded to one of their domestic companies. We have to send out the message that we want to encourage our UK train-building industry, which is of huge value to us, and we want the Government to support it.

Perhaps we need to consider again how we go about procuring these train-building contracts. For many years, Bombardier has questioned how sensible it is to have a feast of contracts and then a famine. How does that enable it to be a sustainable, viable business? How does having to recruit and skill up to fulfil one contract and then lay people off and start again make a company cost-effective and ensure that we are getting the best price for our trains? How can Bombardier continually develop in the UK and improve its processes if it does not know from year to year whether it will have a viable manufacturing business in the UK?

Let us not set any hares running. We all hope that Bombardier will retain a strong manufacturing presence in the UK and that this will not be a fundamental threat. However, it is a significant contract, especially on the back of its not winning the intercity express programme contract. It would be helpful if the Government set out what other contracts they expect to award in the rest of this Parliament, and how significant their value may be. We know that Crossrail should be one contract. Many have raised the question whether the Government can now bring forward that Crossrail procurement in the hope that Bombardier can win it and try to protect jobs in the Derby area.

Some have suggested that the Crossrail contract is very closely linked to the Thameslink contract. The amount of cross-savings between the two might make it very hard for a company that does not have the Thameslink contract to deliver Crossrail competitively. Will the Minister confirm that that is not the case, and that it is open to the Government to award the Crossrail contract to a different provider?

[Andrew Griffiths (Burton) (Con)]

I congratulate my hon. Friend on securing the debate. Bombardier is a major employer in my constituency, too. He has discussed the success of Bombardier and its ability to win contracts. Is he aware of the statistics that show that of 14 contracts that Bombardier bid for that were not related to the Department for Transport, it won 11, yet of all of the contracts it has bid for with the Department for Transport, it has won not a single one?

[Nigel Mills]

I am grateful for my hon. Friend’s intervention. Had he been here from the start, he would have heard me quote those very same statistics. His point is valid, however, and he reiterates the question whether the Department for Transport is handling those procurements in the most effective manner.

I conclude by asking the Minister some questions about future procurement processes. Do the Government think that there is a need for improvement? Should the Department for Transport be handling them? Will the Department guarantee that the socio-economic benefits will be given some weighting in that process? Can the contracts be structured so that UK manufacturing industry has a chance of a sustainable, viable future? Can we look to structure those contracts in a way that gets trains built, and not look for the biggest bank we can find to underwrite 30 years’ worth of financing?

No one should doubt that the train-building industry is of great importance to the Derby area and the UK economy as a whole. We have a proud heritage of train building. We can and should have an exciting future of train building. I urge the Government to do their bit to ensure that that is what we get.